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Managing Assest for Sustainable Communities -A CIP Tra ining Series

Prepared by Stantec Consulting 1

WEBINAR ALBERTA

April 11th 2018

Introductions

Presenter:

Lourette Swanepoel, Stantec Consulting

Moderator:

Daniel Potter, Canadian Institute of Planners



Acknowledgements

This initiative is offered through the M unicipal Asset M anagement Program, w hich is delivered by the Federation of Canadian M unicipalities and funded by the Government of Canada.

GoToWebinarHousekeeping

General

Attendees will be muted for the durat ion of the w ebinar.

This w ebinar is being recorded and w ill be posted on the CIP w ebsite at a later date.

The moderator will be launching polls throughout the w ebinar. Click directly on your screen to participate.



GoToWebinarHousekeeping

Ask a Question

The presenter will provide opportunities to ask questions throughout the w ebinar. Wait for the cue.

Type your question in the “I have a question!” box.

What's your discipline?



What’s your level of understanding?

Outline

W hat is AM & W hy is it Relevant to Planners

Case Study & Quiz

AM Planning Basics

Local Contex t

Taking the plunge

12345



WHAT IS AM & WHY IS IT RELEVANT TO PLANNERS

What are assets?Physical ”stuff” needed to deliver services

Service Delivered Physical AssetShelter HousesTransportat ion Roads & t ransitRecreat ion Skat ing rinks, sport fields, parksSafety Firehalls, t rucks, police stationClean w ater Treatment plant , dist ribut ion netw orkCollect and dispose liquid w aste

Treatment plant, collect ion netw ork

Collect and dispose solid w aste Landfill, recycling centre, t rucksManage stormw ater Collect ion netw ork, ditches, w etlandsManage air quality /GHG Trees

HowWhat



What is asset management?

The ongoing process by w hich w e manage our communal assets to ensure sustainable service delivery.

Think of your ow n home

...cleaning the floors

...servicing the furnace

...replacing the roof

AM DefinedISO 55000: A coordinat ed act ivity of an organizat ion t o realize value from assets.

Realizat ion of value w ill normally involve a balancing of cost s, risks, opport unities

and performance benefit s .

National Roundtable for Sustainable Infrastructure: Asset management is an

int egrat ed bus iness approach involving planning, finance, engineering and

operat ions t o effect ively manage exis ting and new infrastruct ure t o maximize

benefit s , reduce risk and provide sat is factory levels of service to community users

in a socially, environment ally and economically sustainable manner.

International Infrastructure Management Manual: The combinat ion of

management , financial, economic, engineering and ot her pract ices applied t o

phys ical asset s with the object ive of providing t he required level of service in the

most cost effective manner.



Sustainable Service Delivery =

Asset Management

The Challenge

Almost 60% of Canada’s core public infrastructure ow ned and maintained by local governments

Excellent Good Fair Poor Very Poor

Fit for fut ure

Adequat e Requires at t ent ion

U nfit for fut ure

Significant det eriorat ion

35% 35%



2016 CIRC – Key Findings

2016 CIRC – Key Findings



Asset Lifecycle

Asset Deterioration



Asset Deterioration

Asset Deterioration



Double WhammyAssets vulnerable to climate change

Dawson Creek, BC. Source: CTV News

Upfront Cost vs Lifecycle Cost

Focus on initial capital cost

Failing to fully recover costs and fees

Keeping taxes low

Not enough money!No funding reserves!

Stantec Consulting

REP AIR / REHAB COSTS

20%

80%



Reactive vs. Proactive ManagementDeferring costs until asset fails costs more

...and has serv ice implications!

StantecConsulting

Sustainability...More Immediate & Personal

Sustainable development is development that meets the needs of the present w ithout compromising the ability of future generations to meet their ow n needs. –Brundt landCommission

Economic

Social

Environmental

?

Asset Rich, Cash Poor!



Nevermind your grandchildren—your quality of

life is at stake!

• Populat ion projections & Land supply• Development location and typePLANNING

• Provide infrastructure to service development• Replace, operat e and maintain infrastructureENGINEERING

• $ for new capital costs• $ for operat ions and maintenanceFINANCE

Who is Responsible?



Linear Silos




Problem

Solut ion

Linear Silos




Problem

Solut ion

Driver



Partners of AM Planning

Budget

Addressing Underlying Drivers

‘Denial’ strategies Defer cost Secure funding from

others‘Confront’ strategies Increase taxes User fees Reduce service delivery

(w ith engagement) Demand reduction

(such as land use)



CASE STUDY

Undeveloped Lands Under Consideration – Development Industry Pressures



Council Objectives

M andate to Council’s Infrastructure and Buildings Committee

Evaluate financial impacts:

Capital cost - includes buildings, major equipment, land acquisition, etc.

O&M cost - includes labour, materials, contracts, etc. other associated costs

Will current practices make the development financially sustainable?

Scenario Assumptions

Rockland south development only Area split

65% residential 30% infrastructure, commercial, SWM 5% parks

Potential for 5,500 units Population grow th due to this development = 15,000

Timelines: scenarios for development

20 years 275 units/year 30 years 185 units/year

Doubles t he populat ion of urban area



Assumptions (continued)

Development Charges

• 100% Capital Cost Recovery for Fire Protection Services and Engineered Services

• 90% Capital Cost Recovery for library , daycare, parks & recreation, transit, etc.

Employees’ benefits = +25% to salaries

Acquisition of lands for new buildings = 20% of construction costs of buildings

Useful life of assets from PSAB report

Revenue Assumptions

Estimated average annual taxes

Based on property values of similar units in the area

Residential: $1350/unit/year Commercial: $700K to 1.4$mil /year

(use $1mil/year in analysis)

Lower Tier Municipality … add to property taxes County and School Board taxes for total tax bill – not included



Additional Needs Additional infrastructure t o operat e, maint ain, repair and event ually

reconst ruct roads, s idew alks , water pipes, sanitary sew ers, s torm

sew ers new street lights

Expansion of fire stations (Rockland and Clarence Creek)

Expansion/new space for City Hall offices

New/expansion public works facilities (municipal garage, salt

s t orage, w at er and w astewater t reat ment plants, landfill)

Additional equipment: public w orks , fire t rucks , vehicles, daycare

Additional staff – all depart ment s : Firefighting, Public W orks,

Communit y services, Administration, Finance, By-Law enforcement,

Planning and Const ruction

Other addit ional requirement s : Insurance, Library, Police, Public Trans it

Results 20-year scenario

I nsufficient funding only vis ible aft er several years int o t he development

I nfrast ructure deficit + differed maint enance



Observations (continued)

Current practice for growth is not sustainable.

Optimistic growth scenario may not be realistic in the present economic context is there a need for the urban area expansion?

W ill D.C. charges collected be enough to cover $33mil needed for new capital D.C. study underway?

There is no grow th management plan/policy to ensure sustainability.

Some development standards are not consistent or relevant

Can development standards / service levels be lowered?

Observations (continued)

Increasing property taxes can pay for grow th:

30-year scenario seems to create a lesser tax burden (2.5% increase/year vs. 3%/year for the 20-year scenario)

Optimize infrastructure investments:

Adopt and implement preventive maintenance procedures Create dedicated reserve funds Improve efficiency in City operations



Helping?Helping? NOT Helping?NOT Helping?OR

Poll

You just approved a new subdivision but knowing how concerned Council are about costs you made sure that the developer is paying for all the new on-site infrastructure needed AND he w ill be paying a contribution towards future capacity upgrades at the WWTP...

Onsite Costs

Offsite Costs

Capital Costs

O&M Costs

Replacement Costs

Stantec Consulting

REP AIR / REHAB COSTS



The Missing Link

Make the fiscal link during land use planning

Grow th management strategies

Land use bylaw s Neighborhood plans, etc.

Can we afford to build it, operate and maintain it?

Economic

Social

Environmental

BC Municipal Affairs and Housing

w w w.cscd.gov.bc.ca/lgd/greencommunit ies/sustainable_development .htm




Poll

Your community is shrinking and the four-lane M ainstreet is no longer used at full capacity. You propose narrowing the road to 3 lanes and utilizing the space for biking, community gardens, and summer restaurant patio’s.


Poll

Your lakeside resort community is concerned about the environment and climate change so you are w orking on a bike sharing program that would allow residents and tourists the opportunity to get around town center without having to drive on the already congested Main Street.



Boom-bust communities Seasonal communities Shrinking communities

AM PLANNING BASICS



It’s not new but its different

AM then AM nowTechnical exercise St rat egic exercise

Engineering respons ibilit y I nt egrat ed respons ibility – planning, engineering, finance

Buying an AM soft ware program Any dat a (GI S, spreadsheet s, field not es)

Depart ment al management ‘s ilos’ I nt egrat ed asset management

React ive management process Proact ive management process

Capit al focus Life cycle focus

Narrow risk focus Risk assessment process with climate vulnerabilit y / risk

Technical levels of service Communit y engagement on service levels

Framework – FCMNot Just One Plan - Continuous Process

Asset Management Policy

Asset Management Strategy

Asset Management Objectives

Asset Management System

Asset Management Plans

Org

aniza

tion

Valu

es, P

riorit

izatio

n C

riter

ia a

nd

Risk

Pol

icy

Organizational Strategic Plan

Asset Management Roadmap



AM Policy

Formalize and signal corporate

commitment

Outlines the principles that guides

AM across the organization

Connection between community

objectives and management of

assets.

Integration of AM within the

organization.

Key roles for managing the asset

management policy Refer to handout

AM Strategy

Link between the policy level of the organization and the day-to-day implementation.

Outlines current asset management practices.

Identifies the desired state of assets and the target levels of service.

Identifies the critical risks to be managed.

Provides a guide to each department to effectively implement asset management.

Identifies how other corporate plans are linked to asset management plans.

Identifies how AM decision-making is integrated into the organization.

Provides clarity on the roles and responsibilities of the asset management team.

Identifies the approach to reviewing and updating the strategy.



AM PlanAsset Management Plan

and/or

Corporate Asset Management Plan

for each asset type (buildings, w ater, roads, etc.)

that includes all of the assets

Asset Management Plan

INVENTORY &

CONDITION

Current State• PSAB 3150- Tangible

Capital Assets • What do we own?• Where is it? • What is it worth? • What condition is it in?

Very Good

Good

Fair

Poor

Critical




INVENTORY &

CONDITION LEVELS OF SERVICE

Desired State• What are public’s

expectations?• What do regulators require?• What do we need to do

and when?• Do we need more / less?




INVENTORY &

CONDITION LEVELS OF SERVICE

STRATEGYClosing the Gap• How much money do

we need vs have?• How do we prioritize?• Can we lower LOS?• Can we defer?









INVENTORY &

CONDITION

LEVELS OF SERVICE

STRATEGYRISK

Closing the Gap• How much money do

we need vs have?• How do we prioritize?• Can we lower LOS?• Can we defer?






Manage Risk• Where are we

vulnerable?• What are possible

consequences?

Tips for Drafting a Plan

Start - Don’t wait for perfect data

Align approach and format betw een departments

Keep it short & tell a story

Ut ilize examples or templates

Quick Start Tools & Templates for Building

and AM Program

National Asset Management St rategy

– NAMS.plus



?

LOCAL CONTEXT



AB Resources

Upcoming Training

Workshop #1 - Edmonton Region 3-May 4-MayWorkshop #2 - Lloydminster Region 8-May 9-May

Workshop #3 - Grande Prairie Region 24-May 25-MayWorkshop #4 - Lethbridge Region 30-May 31-May

Workshop #5 - Calgary Region 6-Jun 7-Jun

Asset Management for Municipal Staff – AAMDC/AUMA/IAMA

Asset M anagement for Elected Officials - AAM DCWorkshop #5 - Vermilion 17-Apr

Workshop #6 – Spruce Grove 25-Apr



Intermunicipal Collaboration Frameworks & Intermunicipal Development Plans

“As municipalit ies inventory and

assess the services they provide

t hrough t he I CF process , they also

need t o underst and w here future

grow t h or development may be

cons idered and t he implicat ions of

providing services t o that

development .”

https://auma.ca/advocacy-serv ices/programs-initiatives/mga-change-management-resources

ICFService Delivery

IDPLand Use

Management

TAKING THE PLUNGE



Scalable

Sound too complicated for your community?

...it does not have to be.

Assess your Community ReadinessDow nload from the ‘Handouts’



5 Key AM ComponentsPolicy and Governance

Put t ing in place policies and object ives Bringing policies t o life through a s t rategy or framew ork M easuring and monit oring progress

People and Leadership

Set t ing up cross-functional groups with clear account abilit y

Ensuring adequat e resourcing and commit ment

Data and Information

U s ing dat a to support effect ive AM planning and decis ion-making: Asset Dat a, Performance Dat a, Financial Dat a

Planning and Decision-Making

Document ing, s t andardizing how organizat ion sets priorit ies

Plans capit al and O&M investment Decides on budget s

Contribution to AM Practice

Training and st aff development Sharing know ledge int ernally Part icipat ing in ext ernal knowledge sharing

Secure Funding through MAMP

M unicipal governments and partners applying in partnership

Lesser of 80% of Eligible Costs and $50,000Features:

Continuous intake Time from application to decision (max. 8 w eeks) Wider distribution (↑ # of Recipients ≥ 550) Projects ≤ 12 months (including 1 month for reporting) Contract w ith one Lead Applicant (applicants can form

partnerships and share resources).



Secure Funding through MAMP

Eligible activities include:

AM Assessments (needs or risks) AM Plans, Policies, and Strategies Data collection and reporting AM Training and organizational development Know ledge transfer, development and sharing

Broad approach to eligible activ ities to ensure inclusiv ity

Go to w ww.fcm.ca – Programs – MAMP

Align Planning with AM Efforts Just 5 Ways AM & Planning Intersect

1. Environmental planning, ESAs, parks,

tree protection = natural assets

2. Climate resilience = risk management

3. DCCs, amenity contributions = cost

recovery / O&M liability

4. Community engagement = Customer

expectations and awareness

5. Alternative Transportation, TDM,

density, infill, subdivisions = impact

demand for new assets



Benefits

Sustainable service delivery

Better decision-making and transparency

Fiscal stability & less money over lifecycle

Reduced risks Higher customer

engagement and satisfaction

Thank You!

[email protected]

Anissia Nasr: [email protected] Potter: [email protected]

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